Legal Issues: Community Integration in Mining

Transcription

1 PECC Minerals Conference November 2003 Legal Issues: Community Integration in Mining Roger Quick and Reece Allen Gadens Lawyers - Brisbane

2 Role of Lawyers Experts in: Major projects Partnering and alliancing Clear and precise drafting of agreements Ensure compliance with statutory regimes and best practice Document the negotiation process and the agreement Select and co-ordinate the team through our network Assist in negotiation of the agreement and resolution of any disputes

3 Transactions and relationships Seller and Supplier Partner Relationship contracting Two or more interdependent partners to agreement Partner features Partner requirements

4 Risks on Major Projects Big wins require big risks Relationship misalignment is the biggest risk Community integration is one of those risks

5 Risk Strategies Alignment of Objectives Risk Transfer (Traditional) (Partnering) Risk Embrace (Alliancing) Self-serving Co-operating Collaborating Coalescing Source: Alan McLennan Alan McLennan Strategic Services Pty Ltd (2003)

6 Documenting community integration As a major risk, community integration is essential for success of a project Need to document community integration in an agreement Community integration may be required by law (e.g. Native Title Act 1993 (Cth); Oil & Gas Act 1998 (PNG)); or If not required by law, essential for project and documented in contract Agreement between multi-stakeholders (project proponent, various tiers of government and community representative groups (e.g. land council))

7 Types of Agreements Agreement may be binding (a contract) or not binding (heads of agreement) Agreement is an outcome of the negotiation process Agreement can take many forms and names: Impact and Benefit Agreement (Canada) Indigenous Land Use Agreement (Australia) Development Agreement (Australia, PNG) Contract of Work (Indonesia) Good Neighbour Agreement (USA, New Caledonia) Multi-sector partnership (UK Oil & Gas, World Bank)

8 Key Characteristics All agreements should have the following fundamental characteristics: Alignment of objectives and incentives of all stakeholders All stakeholders must have interest in the success of the project (win/win) A true multi-stakeholder partnership Long term agreements require changes / review mechanisms (e.g. 5 year review) Clear and precise undertakings / obligations Precise and accountable payment mechanism (e.g. precise distribution of royalties, audit rights) Governance procedures including coordinating committee, communications procedures Non-adversarial dispute resolution procedures Compliance with any legislative regime

9 5 Stage Methodology Stage 1: Identification and Initial assessment: Identify stakeholders Assess community needs Data collection Development forum Stage 2: Design and Documentation Agreed negotiation process (i.e. structured and documented) Negotiate in good faith Invent options for mutual gain (win/win) Memorandum of understanding Draft agreement

10 5 Stage Methodology (Cont d) Stage 3: Appraisal and Agreement Project design as documented is assessed Benchmarking / costing of initiatives Stakeholder approval to proceed Execution of agreement Stage 4: Implementation Project management Monitor achievement of objectives Conduct agreed reviews (e.g. 5 yearly) Stage 5: Completion and Evaluation Evaluate achievement of objectives

11 Key Initiatives Initiatives ultimately depend on needs of community, legislative requirements and the objectives and funding of the project proponent Key initiatives can include: Royalties / compensation Recognition of entitlements of traditional owners (e.g. native title rights) Employment, education and training Local business development (e.g. microfinance) Environmental management (e.g. waste and water disposal, mine rehabilitation) Infrastructure development (e.g. roads, schools) Cultural awareness and training

12 Gadens Lawyers - Brisbane Roger Quick Partner T: E: rquick@qld.gadens.com.au Reece Allen Solicitor T: E: rallen@qld.gadens.com.au